Foreign branch

Foreign branch

A foreign affiliate that is legally a part of the firm. According to the U.S. tax code, foreign branch income is taxed as it is earned in the foreign country.

Foreign Branch

A branch of a foreign company that operates in the United States, or a branch of an American company operating outside the U.S. In both cases, the branch is legally part of the company and is not its own entity. Each type of foreign branch is subject to special tax considerations.

Under new rules, foreign banks may choose from three modes of entry into the local market, namely setting up a foreign branch, acquiring existing institutions, and incorporating an entirely new company.

Britain's Standard Chartered set up the second foreign branch on Kish a few months later, and the third was Future Bank, a joint venture of Bahrain's Ahli United Bank, Bank Melli Iran, and Bank Saderat Iran.

Furthermore, in situations where the CFC carries on selling or manufacturing activities through a branch in a foreign country, the Internal Revenue Code and regulations impose a branch rule causing the foreign branch to be treated as a foreign subsidiary of the CFC (the branch rule).

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